Saudi Arabia's non-oil growth is expected to average 2.7 per cent this year, better than the growth seen in the last two years, according to a Bloomberg economist.

The kingdom's non-oil growth increased 1 per cent in January, a slowdown from the estimated 2.6 per cent registered at the end of last year, according to Bloomberg Economics monthly series of Saudi GDP.

Ziad Daoud, chief Middle East economist, Bloomberg Economics, said: “Sluggish private consumption, due to cuts to fuel and electricity subsidies, the introduction of VAT and rising inflation, is likely the main culprit behind the slowdown of non-oil activity in January.

“However, this should pick-up due to increased government spending and recently announced royal handouts. We expect non-oil growth to average 2.7 per cent in 2018, better than it’s done in the last two years,” he said.

Created by Daoud, the Bloomberg Monthly GDP for Saudi Arabia provides analysis based on the latest oil and non-oil indicators.

The model makes use of monetary and financial variables such as real ATM cash withdrawals, money supply growth, points of sales transactions and bank clearings of cheques, it stated. – TradeArabia News Service

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